TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 772
X X X X Extracts X X X X
X X X X Extracts X X X X
....sioner of Central Excise & Service Tax, Rajkot. Since all the above stated appeals are arising out of a common order-in-original, they are taken together for decision. 2. The brief facts of the case are that M/s. Global Extrusion Pvt. Ltd. (M/s Global) are engaged in the manufacture of the Brass Products viz., Billets, Rods, Wires, Profiles, Sections, etc. On the basis of intelligence, the factory premises of M/s Global were searched by the officers of Anti-evasion team, Rajkot Commissionerate and various incriminating documents were seized under Panchanama dated 19/20.03.2013. A simultaneous search was also carried out at the residential premises of Shri Dhirubhai Chhaganbhai Bhanderi (Patel), Accountant of M/s Global and other office premises of M/s. Global where certain incriminating documents including computer devices i.e one laptop & one removable hard disc were seized. During the search proceedings, print-outs of data containing details regarding sale & purchase by M/s Global during the period from 01.10.2010 to 16.03.2013 was taken from the computers of M/s Global and from removable hard disk with the help of laptop and the same were also placed under seizure. During the i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such visit except so called difference of 550 Kg. of billets in comparison of stocks recorded in statutory records. The officers concerned had not physically verified stock or weighed the stock of billets but had decided the difference on their own estimates. 4. He also submits that admittedly on 19/20.03.2013 preventive officers from Central Excise Department visited factory premises and showed Search Warrant for the said premises and during the course of search proceedings recovered one piece of paper marked as "New " and one "Javak Chithi" in favour of M/s Jyoti Cutting and on inquiry as stated in the panchnama, director informed the other chithis were with accountant Shri Dhirubhai who also writes accounts of other parties. And during such search proceedings concerned officers visited the premises of the said accountant and surprisingly, immediately handed over some Javak Chithis, though name of the main Appellant is not written on the said documents and accompanied along with officers in factory premises. During such proceedings on inquiry Shri Bhageshbhai informed that records as narrated in Print Out marked as "New" were available in another computer lying in the premises ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity and admissibility of computer print out as an evidence in terms of Section 36B of Central Excise Act as also various case laws but the Ld. Commissioner has not properly considered the submission and relevant case laws referred. 8. He also submits that in the present matter Ld. Commissioner ignored the provisions of Section 9D of the Act. Unless the statement are tested by way of examination as required under Section 9D, it cannot be relied upon. He placed reliance on the decisions in the case of M/s Jai Balaji Industries Ltd. - 2023-8-TMI-989. 9. He further submits that department has relied upon the statement of Shri Manharbhai Prop. Of M/s Chamunda Metals industries that he has admitted purchase of finished goods worth Rs. 1,10,41,312/-. However Balance sheet supplied by Shri Manherbhai for the F.Y. 2010-11 & 11-12 clearly shows that they are not capable of purchasing goods worth of Rs. 1,10,41,312 and hence merely on the statement of the said witnesses it cannot be concluded that the company has cleared goods clandestinely. Since no corroborative evidences are produced by the department and since the requirement of Section 36B are not complied with the allegations of cland....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hed goods out of raw materials purchased without invoices/bills and subsequently, the same were cleared to various buyers. After accepting their liability of central excise duty in respect of such clandestinely cleared finished goods appellant had paid central excise duty of Rs. 89,50,000/- . 14. He also submits that during the investigation of the case, Shri Bhageshbhai Jayantibhai Chanderia, Director in his statement has admitted that wherever "JOB" is written against entry under heading "Name of Buyer", it means that entry pertains to job works done by them. However, after confronting with such entries and asked to prove that they were genuine entries for job work, he has admitted that these entries do not match with any job-work invoice/ challans nor tallying with Central Excise Invoices issued by them therefore, clearances against these entries are their unaccounted sales. 15. He also argued that conditions mentioned in Section 36B(2) of the Act have been duly fulfilled and the print-outs were taken from the seized hard disk / laptop and computer being used in the factory in normal course of their functioning. 16. He further submits that statement of various persons/ co-not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....G) and hard disc Store Jet Transcend -250GB (red Colour) which were seized under Panchanama dated 19/20.03.2013 and derived computer print outs. The adjudicating authority observed that the said evidence was retrieved from the computer and hard disk and the authenticity of all the printouts was admitted by directors of the appellant in their statements. The appellant disputed the veracity and authenticity of the evidences, collected through electronic devices. With regard to reliance on the computerized print out appellants here has objected the mode of reliance for which they argued that as per Section36B of the Central Excise Act, without following the prescribed procedure the said computer document cannot be relied upon. We have also find force in argument of Appellant. In this context we find that the Section 36B of the Act, provides admissibility of micro films, facsimile copies of documents and computer printouts as documents and as evidence. For the proper appreciation of the case, Section 36B of the Act, is reproduced below : Section 36B. Admissibility of micro films, facsimile copies of documents and computer printouts as documents and as evidence. - (1) Notwithstanding ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n succession over that period; or (c) by different combinations of computers operating in succession over that period; or (d) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combinations of computers, all the computers used for that purpose during that period shall be treated for the purposes of this section as constituting a single computer; and references in this section to a computer shall be construed accordingly. (4) In any proceedings under this Act and the rules made thereunder where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say, - (a) identifying the document containing the statement and describing the manner in which it was produced; (b) giving such particulars of any device involved in the production of that document as may be appropriate for the purpose of showing that the document was produced by a computer; (c) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate, and purporting to be signed by a person occupying a responsible official posit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... business of the company. We find that none of these conditions was satisfied by the Revenue in this case. In the present case, the data was not stored in the computer but the officers had taken the printout from the Hard Disk drive by connecting to the computer. The officers had not obtained any certificate as required under Section36B of the said Act. It is also noted that none of the conditions under Section 36B(2) of the Act, 1944 was observed. In such situation, it is difficult to accept the printout as an evidence to support the allegations of the revenue. It is noted that the requirement of certificate under Section36B(4) is also to substantiate the veracity of truth in the operation of electronic media. We also agree with the contention of the appellants that at the time of sealing and de-sealing of the external data storage device as well as the time of obtaining printouts therefrom, a certificate should have been obtained as per the provision of Section36B of the Act. No such certificate has been brought on record without which the evidentiary value of these printout get vitiated. As no certificate from the responsible person of the Appellants was obtained by the departme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... record sought to be used as evidence. Electronic records being more susceptible to tampering, alteration, transposition, excision, etc., without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. 17. Only if the electronic record, is duly produced in terms of Section 65B of the Evidence Act, would the question arise as to the genuineness thereof and in that situation, resort can be made to Section 45A - opinion of Examiner of Electronic Evidence. 18. The Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if requirements under Section 65B of the Evidence Act are not complied with, as the law now stands in India. ........................................... ........................................... "22. The evidence relating to electronic record, as noted hereinbefore, being a special provision, the general law on secondary evidence under Section 63 read with Section 65 of the Evidence Act shall yield to the same. Generalia specialibus non derogant, special law will always prevail over the general law. It appears, the Court omitted to take note of Sections 59 and 65A deali....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 21. We also find that in the present matter appellants disputed the finding of the Ld. Commissioner on the ground that Ld. Commissioner has relied upon the statements of persons, but these statements are not admissible as evidence because the statement of various persons that the same were recorded on computer on already prepared proforma which is stereo typed. In case of raw materials suppliers and buyers" statements, in most of case the questions are same and even the answers also same. At the some place only name, value and quantity were changed. We also find that Ld. Counsel for the appellant strongly argued that the adjudicating authority had not examined the witnesses as per the the mandatory procedure laid down under Section 9D of the Central Excise Act. We agree with the arguments of the appellant and observed that in the whole matter Revenue and Ld. Commissioner relied upon the statements of persons and said statements disputed by the appellants and their directors and also co-noticees. Therefore in this circumstances, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that Hon'ble Punjab & Haryana High Court in the case of Sukhwant Singh - (1995) 3 SCC 367 has observed as under:- "8. It will be pertinent at this stage to refer to Section 138 of the Evidence Act which provides : "138. Order of examinations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross-examined, then (if the party calling him so desires) re-examined. The examination and cross-examination must relate to relevant facts but the cross-examination need not be confined to the facts to which the witness testified on his examination-in-chief. Direction for re-examination. - The re-examination shall be directed to the explanation of matters referred to in cross-examination; and if new matter is, by permission of the Court, introduced in re-examination, the adverse party may further cross-examine upon that matter." 9. It would, thus be seen that Section 138 (supra) envisages that a witness would first be examined-in-chief and then subjected to cross-examination and for seeking any clarification, the witness may be re-examined by prosecution. There is, in our opinion, no meaning in tendering a witness for cross-examination only. Tenderin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the revenue by adducing tangible, convincing and cogent evidences, CESTAT in the case of Esvee Polymers (P) Ltd. v. CCE [2004 (165) E.L.T. 291 (Tri.)] dealt with a case of alleged clandestine production and clandestine removal. The case was based on some private slips. The CESTAT observed that the mere slips or statement are not sufficient for confirmation of demand and allegation of clandestine removal. Evidence in the form of receipt of raw material, shortages thereof, excess use of electricity excess/shortage of inputs in stock, flow back of funds, purchase of final products by parties alleging receipt and removal of goods etc. is necessary. CESTAT in the case of CCE v. Supreme Fire Works factory [2004 (163) E.L.T. 510 (Tri.) dealt with the allegation of clandestine manufacture and removal and observed that mere suspicion can not take place of proof. Proof and evidences of purchase of raw materials, sale of final goods clandestinely is necessary. The allegations are not sustainable in absence of evidences. CESTAT in case of CCE v. Shree Narottam Udyog (P) Ltd. [2004 (158) E.L.T. 40 (Tri.)] has dealt with the allegation of clandestine manufacture and removal of goods and he....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and removal by the appellant. No evidence has been led by the Department to show that the appellant had sufficient production capacity to produce the quantity of goods alleged to have been produced clandestinely. There is no allegation that the appellant has shown excess production of goods. There is no evidence regarding excess consumption of electricity. No unaccounted cash has been recovered from the unit of the appellant during the search. No evidence has been found regarding receipt of money consideration for the alleged unaccounted clearance of finished goods. In the absence of these corroborative evidences, in our considered view, the demand of duty is not sustainable. The Tribunal in large number of judgments have held that for confirmation of demands there has to be purchase of inputs, excess utilisation of power consumption, shortage of raw materials in terms of entries made in register, sale of final product clandestinely, evidence of transport, etc., to establish the production and sale of final goods. In the present case no such evidence has been placed on record. It is now a settled position of law that mere slips/chits are not sufficient for the purpose of confirmin....